Driven by higher oil prices, Colombian state-controlled oil company Ecopetrol (NYSE: EC | BVC: ECOPETROL) saw significant increase in earnings in the first half of 2018 along with major year-over-year jumps in both net income and operating profit in the first half of 2018.

The rising price of oil allowed the company to see these improved financials despite seeing a slight dip in production, from 715,000 barrels per day in the first six months of 2017 to 711,000 in the same period this year.

But Ecopetrol raised its earnings nevertheless. With almost 15.8 trillion pesos (EBITDA), it saw an increase of37.7% for the six-month period compared to the 11.5 trillion pesos brought in during the first half of 2017.

The Bogotá-based company’s saw even more promising jumps in consolidated net income. Its nearly 6.6 trillion pesos in income was more than double the roughly 2.6 trillion pesos reported for the first six months of 2017, and its operating profit of 11.6 trillion pesos from January through the end of June this year was nearly twice the 6.6 trillion pesos in the same stretch of 2017.

This was driven by higher sales that came as a result of increased oil prices, which averaged $71.2 USD per barrel for Brent crude over the past six months compared to $52.7 USD per barrel in the first half of 2017.

“Our commercial strategy, announced in 2015, has succeeded in yielding tangible benefits,” said Felipe Bayón Pardo, CEO of Ecopetrol. “In the first half of 2018, we succeeded in maintaining [production] levels close to those of the first half of 2017 … This achievement was possible thanks to the optimal operation of the different business segments and the financial discipline of the Group’s companies, combined with better crude prices during the period.”

The improved results in the second quarter this year were equally encouraging.

Ecopetrol finished with nearly 17 trillion pesos in sales last quarter, up from the 13.2 trillion in the second quarter of 2017. Its year-over-year operating profit of 6.3 trillion pesos was up 95% compared to the same time frame in 2017 and its net income performed even better, growing by 154% from just 1.5 trillion pesos in the second quarter of 2017 to 3.8 trillion last quarter.

The company also pushed out a higher production total of 721,000 barrels per day, up 2.8% from the first quarter.

“During the second quarter of 2018, we saw significant operational and financial achievements for the business group,” said Bayón. “We posted an EBITDA margin of 51%, the highest in the business group’s history, and had the highest production of the past seven quarters.”

In its ongoing push to increase reserves, Ecopetrol also drilled five new exploratory wells in the first half of 2017. Three were drilled in the Middle Magladena region (Bufalo-1, Coyote-2, and Coyote-3) with the other two coming in the Llanos Orientales (Jaspe-6D and Capachos Sur-2).

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About the Author

Jared Wade is editor in chief of Finance Colombia. He is a Bogotá-based journalist with 15 years of experience covering topics including business, financial services, Latin America, and sports. Email him at jared.wade(at) financecolombia.com or follow him on Twitter at @Jared_Wade.